Argos sales rebound with high street presence

SCOTT REID

ARGOS is benefiting from its 700-plus store estate as increasing numbers of shoppers opt to click and collect, it emerged today.

The group’s sprawling network of shops in nearly every UK town and city had been seen by some in the City as a structural weakness as spending gravitates towards the internet.

But as the popularity of click and collect – where customers don’t have to wait at home for a delivery – has grown, its estate is now seen as a competitive advantage.

The firm, which is owned by Home Retail Group, said click and collect represented 29 per cent of total sales of £868 million in the 13 weeks to the end of May. Overall internet sales were 42 per cent of total takings.

Finance director Richard Ashton said: “People were writing articles less than two years ago saying that we needed to do an emergency rights issue [of new shares] and close a third of our portfolio.

“We always said that just made no financial sense. We were strongly of the belief even in those days that multi-channel [retailing] was the way forward, that check and reserve was going to be a huge convenience factor for customers.”

His comments came as warm weather and demand for TVs and other “big ticket” items such as kitchens helped buoy trading during the period.

Argos, which has 734 stores, lifted like-for-like sales by 4.9 per cent after seasonal products such as barbecues sold well alongside games consoles and televisions ahead of the World Cup.

DIY chain Homebase, which is also part of Home Retail, saw sales of fitted kitchens and seasonal plants and power hoses push like-for-like sales up 7.9 per cent.

The group expects full-year pre-tax profits to be in line with market forecasts of £129 million, compared to the previous financial year’s haul of £115.1m.

Analysts at retail research group Conlumino noted: “Stores, once seen as a burden too great for Argos to bear, have now become perhaps its greatest advantage over pure-play retailers.”